Good Morning! In today’s issue, we look at how an independent central banker has benefited Russian president Vladimir Putin, Trump's criticism of his own central bank appointment, tariffs on China and a challenger to Japan's Prime Minister Abe.

PRESIDENTS AND CENTRAL BANKS, RUSSIA EDITION

Why isn't Russia experiencing an economic crisis? Like Turkey it is run by an autocrat who meddles extensively in the economy. Like Venezuela, it is highly dependent on oil revenues. And like both it has been battered by U.S. sanctions and tariffs. The most important reason may be central bank governor Elvira Nabiullina. As Anatoly Kurmanaev writes, President Vladimir Putin has given her remarkable autonomy to combat inflation and close weak banks. As a result, inflation is at a post-Soviet low of 2.2%. In Turkey, where the central bank has been pressured to limit interest rate rises, it's 15% and in Venezuela, where the budget is financed with money printing, it may hit 1,000,000%. High inflation has helped topple many regimes, including the Soviet Union; perhaps that lesson is not lost on Mr. Putin.

PRESIDENTS AND CENTRAL BANKS, U.S. EDITION

After making Jerome Powell chairman of the Federal Reserve, U.S. President Donald Trump seems to have buyer's remorse. At a fund raiser Friday, he claimed he was told Mr. Powell would support cheap money. But Mr. Powell has gone ahead and raised interest rates: “That can only happen to Trump,” he complained, according to a person familiar with the matter, Peter Nicholas and Nick Timiraos report. Mr. Trump is worried that higher rates will hurt his reelection chances in 2020, another person close to the White House said. While Mr. Trump may not show Mr. Putin's restraint when it comes to criticizing the central bank, he hasn't yet pressured it to change course as Turkey has. Short of firing Mr Powell - which might precipitate a financial backlash - there's not much Mr. Trump can do other than fill remaining vacancies on the Fed's board with more pliable governors. His criticism, rather, is a way of shifting the blame to the Fed if the economy and markets stumble, a person close to the White House said.

Monday, the first of six days of hearings on the U.S.' proposed tariffs on $200 billion of Chinese imports, was dominated by companies pleading for exemptions, Bob Davis and Andrew Duehren report. Whether this will change the outcome is doubtful: The American Chemistry Council got most targeted chemicals exempted from the first round of tariffs, but very few from the second round, which “means they aren’t really listening to people,” said a representative. It helps, though, to have a cabinet member plead your case. Budget director Mick Mulvaney is helping Element Electronics, which assembles televisions in his home state of South Carolina, pursue an exemption for a vital component, according to McClatchyDC.

ABENOMICS FACES A RECKONING

Japan's economy is growing, unemployment is the lowest in decades, and wages are finally rising. But as in Germany and the U.S., that's not necessarily benefiting the people in charge: in a poll released this week , only 23% thought Prime Minister Shinzo Abe's program, dubbed Abenomics, is going well and 57% thought it wasn’t, Megumi Fujikawa reports. Sensing an opening, former defense minister Shigeru Ishiba is challenging Mr. Abe for leadership of the ruling Liberal Democratic Party. The party elects its leader (who will automatically become prime minister) on Sept. 20. Though Mr. Ishiba is polling better among voters, Mr. Abe appears to have locked up the necessary support from members of parliament.

QUOTE OF THE DAY

“Exporters made money on the cheap yen and monetary easing, and they’re all having fun playing golf at Mr. Abe’s vacation home."

Japan's former defense minister, Shigeru Ishiba, is bidding for the job of Prime Minister Shinzo Abe whose policies he says have have failed ordinary Japanese.

South Korea's growth model is under threat as its once-dominant manufacturers lose market share to China, according to the Financial Times. In shipbuilding, its market share has declined in the past decade from 35% to 24% while China's has almost doubled. "Ulsan, home to Hyundai’s heavy and automobile industries, was once South Korea’s fastest-growing and wealthiest city. Today, it represents the nation’s rust belt, the human toll of economic decline evident in the increasing spate of suicide attempts (nearly 200 so far this year). Young people are also fleeing: having quadrupled since the 1970s, the population of Ulsan began to decline in 2016."

As president, Barack Obama lavished attention and stimulus money on Elkhart, Ind., the nation's RV manufacturing capital. The town's subsequent recovery is now threatened by Donald Trump's tariffs. Yet, The Daily Beast reports, this has had no effect on political allegiances: "In 2016, Trump trounced Hillary Clinton with 64 percent of the city’s vote. And even today, as the impact of tariffs looms over the city, voters seem perfectly content with their political choices."

The Fed should take out some insurance against future banking problems by raising capital requirements now, writes Jason Furman on the Journal's op ed page. The Fed has the authority to adjust banks' "counter-cyclical capital buffer" to moderate booms and busts in bank lending and risk. Raising it now "would set a precedent, moving the Fed’s decision making on capital standards toward a more predictable approach, like the one for setting interest rates. [It] would give the Fed the ability to lower them during a recession, which could ... be an especially important new tool because ... when the next recession hits, the Fed probably won’t be able to cut interest rates by its recent average of about 600 basis points."